For the past 16 years the state of Texas has been issuing
air quality permits to refineries and other major sources that permitted
emissions caps on facilities, and allowed facilities to comply with the caps in
a manner that gave them some operating flexibility while not exceeding the
overall facility cap specified in the permit. This approach, also used in other states, is generally
applauded by companies, regulatory agencies, and also by environmental
groups. It is a win-win for
everyone. So why did EPA void the program?

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First, state programs operate under authority delegated by
USEPA, so EPA does have the right to disapprove a state program it deems to be
inadequate under the federal Clean Air Act. A major problem with the EPA action disapproving the Texas
permitting program is that there are existing sources in Texas permitted under
the program that are relying on the permit terms in their existing permits and
have based their business decisions on an existing established permitting
program that has been in place since 1995.

EPA had the ability to veto state permit actions when they
were put in place by Texas, but apparently did not do so. To now cast into disarray the permits
of all sources permitted with emissions caps will seriously disadvantage some
or many of the sources permitted under this approach. The reason this will be so difficult is that sources using
emissions caps in their permits do so to more cost-effectively meet overall
facility emission limits, while letting one or more difficult to control (or
much more expensive to control) emissions units emit more than otherwise might
be required, in exchange for controlling other emissions units to a tighter
level than required. The total
emissions from the sources will therefore meet the facility-wide emissions
limits, but one or more emissions units within the source might be emitting at
a level above a limit for that emissions unit than would have been required if it were
the only emissions unit being permitted.

Since the current permitting program in Texas has been issuing permits
with caps for 16 years, with implicit EPA approval, the reasons for disapproval
now are not clear.

The result of this action will be widespread, and will drive
permit holders to see if they can upgrade controls on some sources that might
have only a few remaining years of useful life, and will almost certainly lead
to plant closures of facilities that just cannot afford to put on new controls
on existing emissions units.